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14.07.202610:27 Forex Analysis & Reviews: GBP/USD – July 14th: Kevin Warsh and Inflation

Relevance up to 04:00 2026-07-15 UTC--4

On the hourly chart, the GBP/USD pair consolidated below the 76.4% Fibonacci retracement level at 1.3382 on Monday, suggesting a continuation of the decline toward 1.3335 and 1.3298. A rebound from the 61.8% Fibonacci level at 1.3335 would favor the pound and allow for a modest recovery toward 1.3382 and 1.3457.

Exchange Rates 14.07.2026 analysis

The wave structure remains bullish. The latest completed downward wave broke below the previous low, while the latest upward wave exceeded the previous peak and continues to develop. Thus, the bulls remain on the offensive, although I expected this move approximately two to three weeks earlier. Better late than never. In my view, the bearish impulse that began in 2026 has ended, and only geopolitical developments can prevent the bulls from maintaining their advance.

The news background on Monday supported bearish traders due to a series of disappointing geopolitical developments. At present, it can be said that negotiations between Tehran and Washington have stalled, while military operations and blockades have resumed. As a result, the bears likely felt a renewed surge of confidence at the start of the new week. Today, the United States will release the important June inflation report, which could also support the bears. If the figure exceeds 3.8%, the result will be viewed as unfavorable. Inflation would then be slowing less than the market expects, and together with geopolitical tensions, traders may become even more convinced that the FOMC will tighten monetary policy further. Kevin Warsh could also add fuel to the fire when he addresses members of the U.S. Congress later today. His rhetoric and stance have likely not changed during the three weeks since the latest Fed meeting. If that is the case, the FOMC official may once again point to persistently high inflation, implying the need for a rate hike. Therefore, as of Tuesday morning, the probability of a stronger U.S. dollar appears relatively high.

Exchange Rates 14.07.2026 analysis

On the 4-hour chart, the GBP/USD pair has returned to the 61.8% Fibonacci retracement level at 1.3348. A rebound from this level, combined with a bullish divergence on the CCI indicator, would allow for a reversal in favor of the pound and a resumption of growth toward the 1.3467–1.3482 resistance level. Consolidation below 1.3348 would increase the likelihood of a further decline toward the 76.4% Fibonacci level at 1.3277.

Commitments of Traders (COT) Report:

Exchange Rates 14.07.2026 analysis

Sentiment among the Non-commercial category of traders became less bearish during the latest reporting week, although it remains bearish overall. The number of long positions held by speculators increased by 7,415, while the number of short positions declined by 6,829. The gap between long and short positions now stands at approximately 45,000 versus 132,000. Bears have dominated in recent months, but unlike before, this dominance is no longer unquestioned because the news background has changed significantly. The bearish advantage is now nearly threefold.

I still do not believe in a long-term bearish trend for the pound, but in the near term everything will depend not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks the market has shifted toward expectations of peace, but negotiations between Iran and the United States could be lengthy and difficult. There is also no guarantee that they will end with the signing of a nuclear agreement.

Economic Calendar for the United States and the United Kingdom:

  • United States – ADP Employment Change (weekly) (12:15 UTC).
  • United States – Consumer Price Index (12:30 UTC).
  • United States – Speech by Federal Reserve official Kevin Warsh (14:00 UTC).

On July 14, the economic calendar contains three events, two of which are considered important. The influence of the economic background on market sentiment is expected to be felt during the second half of Tuesday's trading session.

GBP/USD Forecast and Trading Tips:

Short positions became possible after a close below 1.3382 on the hourly chart, with targets at 1.3335 and 1.3298. These trades may still be held today. Long positions become possible on a rebound from either 1.3335 or 1.3298, targeting 1.3382.

Fibonacci grids are drawn from 1.3457–1.3139 on the hourly chart and from 1.3158–1.3655 on the 4-hour chart.

*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.

Samir Klishi,
Analytical expert of InstaSpot
© 2007-2026
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